The DMCA should not stand in the way of phone unlocking

March 15, 2013

Written by Andrew McDiarmid

The Obama Administration’s strong statement in support of cell phone unlocking has quickly generated a flurry of bipartisan activity on capitol hill. All the attention and energy is a welcome response to the Copyright Office’s decision that as of January 26, unlocking your new phone to use it on another mobile network is no longer exempt from lawsuits under the arcane and technical anti-circumvention provisions of the DMCA.

As I wrote in 2009 (in connection with the previous round of Copyright Office proceedings on anti-circumvention exemptions), it makes no sense for copyright law to stand in the way of wireless customers unlocking their phones. Rather than protecting any meaningful copyright interest, opponents of the exemption for unlocking are instead interested in protecting their business model of selling phones below cost and recouping their subsidies through ongoing monthly service fees.

It’s a bit like Gillette selling handles at a loss and making their money selling expensive disposable razor blades. Nothing inherently wrong with that business model, but should it be enforced by copyright? It’s also reminiscent of a famous anti-circumvention case, Lexmark v. Static Control Components, in which Lexmark sued SCC under the DMCA for circumventing a piece of software on Lexmark printers that locked out unauthorized refilled toner cartridges. There, the appeals court found no DMCA violation, and the judges emphasized that the DMCA must be interpreted consistently with broader copyright purposes, and not as a tool for companies to enforce contracts or lock out competitors.

By analogy, your phone is the printer, and your service is the ink. Where’s the copyright harm in taking your phone to another network? It may break your contract, and you might owe the original carrier a termination fee, but these mechanisms should be sufficient to guarantee that a carrier gets its subsidies back when customers leave early.

Unfortunately, this time around the Copyright Office was not convinced that proponents of the unlocking exemption had shown significant harm from the unlocking prohibition or a lack of alternatives to unlocking going forward, so it recommended that the exemption not apply to phones purchased after January 26. In part this was because of the increasing availability of unlocked phones at full price (AT&T says it already allows subscribers to unlock their phones – a good trend for openness and portability for sure – but critics say it’s not always so easy). As a copyright policy matter, however, it is not clear why this should matter at all. Once a phone has been purchased, you should be able to use it as you see fit, subject to contract-based provisions such as early termination fees. The fact that you could have bought an unlocked phone instead doesn’t lessen the absurdity of copyright law standing in the way your decision to switch to a competing network.

So what’s to be done? Three bills have been introduced in the Senate, each taking a different approach. First, Sen. Ron Wyden introduced the “Wireless Device Independence Act of 2013,” which would create a welcome permanent exemption in the DMCA for unlocking cell phones and other mobile wireless Internet devices. Next, Sen. Amy Klobuchar, along with Sens. Blumenthal and Lee, introduced the “Wireless Consumer Choice Act,” which would direct the FCC to require licensed mobile carriers to permit unlocking of devices. This approach would not directly confront the principle that the DMCA shouldn’t apply to cell phone unlocking in the first place, but would in practice give customers the ability to unlock without fear of getting sued. Lastly, this week Sen. Patrick Leahy, along with Sens. Grassley, Franken, Hatch, Klobuchar, and Lee, introduced the “Unlocking Consumer Choice and Wireless Competition Act,” which would reinstate and extend the 2010 exemption for unlocking used wireless phones through 2015, when the Copyright Office is slated to consider DMCA exemptions again.

On the House side, yesterday Reps. Bob Goodlatte, John Conyers, Howard Coble, and Mel Watt introduced a companion to Leahy’s bill, and Reps. Chaffetz and Eshoo have also indicated that they will introduce legislation.

It is encouraging to see bipartisan interest in this issue. Cell phone unlocking isn’t a copyright matter and shouldn’t be treated like one. The real questions here are about competition, contracts, and ultimately consumer choice, and on those fronts allowing unlocking is good policy. With support from the Administration and the chairmen of both the House and Senate Judiciary Committees, it seems there is a decent chance that common sense and consumer choice will prevail.